Monday, July 7, 2008

The traditional income statement for a manufacturer includes a cost-of-goods-sold amount that combines variable costs and fixed manufacturing overhead in the statement. Cost are not grouped by behavior but by function. CVP Analysis is harder to perform when costs are not grouped by behavior

The contribution income statement is presented in a format that highlights cost behavior on the income statement. Variable Costs are subtracted from sales to highlight total contribution margin. Fixed expenses are subtracted to calculate the period’s net income. This format is used for variable costing.

3 comments:

Thanks for letting know about various income statement specified description. I like the format mentioned here. PanXpan helps teams research and understand their business expenses. The module called finance summary research is what you want to look at.

A poorly written piece of writing can have a foul impression on your guide or supervisor and result in loss of marks. Too many mistakes can produce your piece of writing writing look too weak. See more statement of purpose for mba